Why 'Rise' is the new Mahindra mantra?

Anand Mahindra, VC and MD, M&M explains how and why 'Rise' is the new Mahindra mantra.

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Why Rise is the new Mahindra mantra?

Anand Mahindra, VC and MD, M&M explains how and why 'Rise' is the new Mahindra mantra.

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The Mahindra Group has a new tagline, which reflects a new strategy. It's a call to action — a core purpose that will galvanise employees, customers and stakeholders in coming together to form a more cohesive, formidable unit. The Mahindra brand logo will read as Mahindra Rise from here onwards. This tagline is the acceptance of no limits in creativity, alternative thinking and drive positive change. This is not some corporate branding but a new strategic move that will cost the Mahindra Group Rs 120 crore over the next three years. It will strengthen Anand Mahindra's federation of companies. This is a strategic move.

Anand Mahindra, VC and MD of M&M explains how and why 'Rise' is the new Mahindra mantra.

Mahindra says, “About 13 years ago we felt the need for a core purpose in the group. A core purpose is important even for an individual company. But for a group of companies it becomes even more important to create alignment. The construct of core purpose intrigued me. It stems from a kind of hypothesis or a construct."

He further says, "What if you were working in a company which was taken over by a competitor for the sole purpose of liquidating the company and the competition? But you were well paid and everyone was well paid and no one in the company had any cause financially to regret the liquidation of the company. What would you still miss about the company, about going to work everyday? If you can define that, you are close to defining what the core purpose of the company.”

"In other words, the differentiation that makes people to go for work everyday transcends the goal of roti, kapda aur makan. We started this exercise 13 years ago to define it. We redefined the company’s founder objective when M&M was created. At the time of independence, it was to demonstrate that Indians were second to none which worked very well. It energized everyone and the results were for everybody to see. As time went by two thinks happened. Firstly, we grew, India grew in stature and Indian companies grew. All of a sudden, we were second to none which was rather defensive. Secondly, as a corporation, we were becoming increasingly global.", he added

He further adds, "So, the noises around the group was that how was this relevant to me? If I am Mr Chi, running our Chinese operations, why would I get up everyday and work to prove that the Indians were second to none? So, there was a need to change. At that time, I asked our office of strategy management an appropriate and contemporary core purpose that had a number of foreign expats feeling that lack of connect. If we can position ourselves as companies in business, to engender our consumers and shape their own destiny; there will be value, positioning, trust and a viable business model in it."

In an interview with CNBC-TV18's Menaka Doshi, Anand Mahindra, VC and MD of M&M spoke about their new tagline 'Mahindra Rise'.

Below is the verbatim transcript of the video. Also watch the accompanying videos.

Q: If we rewind back to 1999 or 2000, you wanted to unlock value in the group. Over the course of the last decade of creating a federal structure that you have accomplished successfully, is it the next big challenge? When you create a federal structure, you need to find a sense of ownership that keeps the disparate parts of that structure together or links it to the mothership. As opposed to each one has either identity issues with the mothership of friction. Does it come as one of the key challenges?

A: Essentially yes, that is exactly the idea. An empowered federation is a group of companies that are independently listed and have independent boards that are accountable to those boards. My job when I head a federation is to bring the value to these truly empowered and independent companies. I am constantly obsessed with ways to add value. There is a way of adding values by adding value through values, core purpose, sense of urgency and commitment. All this is uncommon which comes when you belong to a larger community. So, my goal is to shape that community and its purpose.

M&M stock price

On March 31, 2015, Mahindra and Mahindra closed at Rs 1187.15, down Rs 12.75, or 1.06 percent. The 52-week high of the share was Rs 1421.00 and the 52-week low was Rs 964.70.

The company's trailing 12-month (TTM) EPS was at Rs 59.05 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 20.1. The latest book value of the company is Rs 270.60 per share. At current value, the price-to-book value of the company is 4.39.